• Equity Markets: U.S. equities advanced yesterday following the Federal Reserve’s widely anticipated quarter-point interest rate cut. The S&P500 and Nasdaq rose +0.67% and +0.33% respectively. Europe rose +0.07%. A key measure of market breadth, the equal-weighted S&P 500 rose 1.4%, suggesting that market strength broadened beyond just Big Tech. In the US, nine sectors were positive with 77% of stocks ending higher. Industrials (+1.84%) and Materials (+1.77%) were best, while Utilities (-0.11%) was weakest. HSBC increased its price target on Johnson & Johnson as part of its 2026 outlook for the pharmaceutical sector and believes the sector is well positioned to outperform in 2026. In Europe, four sectors were in positive territory with 40% of stocks ending higher. Health Care (+0.37%) and Consumer Staples (+0.34%) were best, while Energy (-0.79%) and Utilities (-0.75%) were worst. HSBC shares climbed (+3.2%), after another broker upgraded Europe’s largest bank to a buy, citing expectations of strong growth in Hong Kong deposits and Asia wealth business.
• Macro: In macro news yesterday, from the Fed, primary focus overnight was on the FOMC meeting, delivering a 25 bp rate cut as expected. The vote included three dissents, the first time that’s happened since 2019, with two members favouring a hold and one calling for a 50 bp cut. The dot plot continued to indicate one additional cut in 2026, but markets are still pricing in two cuts. The Federal Reserve also announced a $40 billion short-term bond-buying program only weeks after halting the reduction of its balance sheet, following recurring stress in money markets. In Europe, UK RICS House Price Balance (Nov) remained weak at -15.7%, although improved from last month’s reading of -19.1%. Economic releases today include Ireland CPI (Nov) figures at 11:00 and in the US we have Initial Jobless Claims at 13:30.
• Stocks: Shell Plc: (Overweight PT 3200p,+17% Upside): Details around plans to dissolve its joint venture with Rosneft.
• Debt: US bond yields declined slightly after the Federal Reserve cut its base interest rate by 25bsp as expected. Goolsbee joined Schmid in dissenting in favour of cut while Miran again voted for a 50bp cut

Opportunities this week:

• We are reiterating our BUY rating on Flutter with an increased price target. (BUY PT: $255)
• Kingspan’s shares ended last week near a six-month low, presenting a buying opportunity for investors willing to withstand some short-term volatility for an attractive long-term growth story. (BUY PT: €90)
• Last week we met with the investor relations team of DCC and came away with confidence in the business strategy which targets both topline and margin growth. (BUY PT: €72.50)